Half A Million Council Tenants To Lose Right To Buy Houses In England

16th January 2025

Right to Buy has been a cornerstone of housing policy in England since its introduction in 1980, and has enabled over two million council tenants to purchase their homes at a substantial discount.

The scheme has boosted home ownership and democratised wealth, especially for early buyers, but the long-term failure to replace the homes sold has significantly depleted the social housing stock, driving up the housing benefit bill as a result.

Nearly one million more social homes have been sold under Right to Buy than replaced since its introduction.

Right to Buy was abolished in Scotland and Wales in 2016 and 2019 respectively, but the UK Government intends to take a different tack in England. Its current consultation proposes tighter eligibility criteria and reduced discounts, for example, as well as targets to ensure replacement homes match the tenure type and location of those sold.

his would mean 0.5 million fewer properties would be eligible for purchase through Right to Buy in England today. In practice, however, this will likely have limited effect: Right to Buy sales already stand at a low level (just over 11,000 in 2022-23), in part because the majority (62 per cent) of social renters' homes are owned by housing associations and are not eligible for Right to Buy, but also because so many current tenants of council housing cannot afford to buy their home, given very low incomes in the sector.

Of the 500,000 social renters who would no longer be eligible for Right to Buy under the new proposals, nearly half (over 240,000) were living below the poverty line in 2022-23.

In practice, then, the current proposals to reduce the outflow of council homes due to Right to Buy will likely have minimal impact on the decades-long decline in social housing. Instead, what is needed is new investment.

Building approximately 125,000 new homes for social rent - enough to house all the families currently in living temporary accommodation in England today - would cost £15 billion over this Parliament, or 15 per cent of the additional £100 billion of public investment that the Government has said is in play across all government departments at the forthcoming Spending Review; returning to 2010 levels of affordable housing stock relative to the size of the population would require nearly 400,000 new homes and £50 billion in funding.

But if the Government can deliver on "the biggest increase to social and affordable housing for a generation", then its further proposal to exempt new-build homes from Right to Buy looks like its most astute idea of all.

Righting Right to Buy? The Government's proposed reforms to the Right to Buy scheme
Right to Buy has been a controversial policy from its introduction in 1980 right through to the present day.[1] A 1979 Conservative Party manifesto pledge, Right to Buy gave local authority tenants of three or more years the chance to buy their own homes from local councils at a significant discount.

Over the following four decades, it facilitated the sale of more than two million homes, radically reshaping England's housing stock.[2] Some people see the scheme as a great equaliser, boosting home ownership and wealth levels among long-term council tenants.

This was particularly true for early cohorts of buyers, often higher-income tenants, who subsequently benefitted from the house price boom over the late 1990s and early 2000s. Growing wealth among this cohort of buyers has been identified as a downward pressure on aggregate wealth inequalities over the heyday of Right to Buy.

However, others take the view that any reduction in aggregate wealth inequalities has come at the cost of a one-off giveaway of state assets, amounting to a catastrophic erosion of the UK's social housing stock, and a corresponding rocketing of the state's housing support bill. As shown in Figure 1, Right to Buy sales have far outstripped the construction of replacement social homes, resulting in net reductions in social housing supply over much of the 1980s, mid-1990s and 2010s.

Indeed, since Right to Buy was introduced, nearly one million more social homes have been sold than have been built (1.3 million compared to 2.2 million), despite a target introduced in 2012 to replace homes sold through the scheme on a one-for-one basis. This target has been missed by a total of over 14,500 homes between 2012 and today.

Council-administered social homes are not the only source of affordable housing in England, however. Increasingly, housing associations have played a larger role in affordable housing supply, the majority (62 per cent) of social renters’ homes are owned by housing associations, and housing associations have built 94 per cent of all recorded affordable housing completions over the last decade. This is important because homes owned by housing associations are not eligible for the original Right to Buy scheme. However, there are currently two main exceptions. Tenants could have a ‘preserved Right to Buy’ if they met the criteria for Right to Buy before their home was transferred from council ownership to a housing association. And the Right to Acquire scheme, introduced in 1998, allows housing association tenants of three years or more to purchase their homes if they were built with public funding after April 1997, albeit at a lower discount rate than the Right to Buy scheme.[3] These additional sources of tenant sales have further accelerated the depletion of England’s affordable housing stock, which fell from a peak of 5.5 million in the late 1970s, to just 4.1 million today (despite significant population growth over this period).[4]

Why is the depletion of England’s affordable housing stock such an acute problem for the Government? According to Freedom of Information requests, over 40 per cent of homes sold under Right to Buy have ended up in the hands of private landlords, meaning that low-income families who would likely have been social tenants are now increasingly finding themselves in the private rental sector. This places low-income households in much more precarious housing, and one that is potentially more costly for both families and the taxpayer. Despite repeated freezes to Local Housing Allowance rates that shift the burden of housing costs from the Government to low-income families, the state’s housing support bill has still ballooned. Alongside sky-rocketing private rents, this has contributed to driving the cost of housing support from £4.5 billion in real terms in 1980-81, up by nearly seven-and-a-half times, to £33 billion today.

Read the full Resolution Foundation report HERE